2013/2014 Annual Report

2013 - 2014

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With the dedicated team of brokerselected by our membership, as well as public

members, RIBO continues to serve the interests ofconsumers through regulating the profession.~

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2013 – 2014 RIBO COUNCIL Standing (Left to Right):Patty Crawford, Nick Dzudz, Beth Pearson, Norma Hitchlock, Tracy McLean, Trish Krawec

Seated (Left to Right):Gil Constantini, John Gelston, Doug Grahlman, Jeff Bear, Danny Craig

Absent:Franklin Lyons

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It was my honour to serve as RIBO President

for the past year and to have the opportu-

nity to chair an organization so important to

our profession. To have the confidence of

Council and to represent RIBO across this

province and the country has been a privi-

lege. I encourage you to consider running

for Council in the future, as it provides an

extraordinary opportunity to participate in

the regulation of our profession. I would be

happy to chat with anyone considering

putting his or her name forward.

Social media is used increasingly by brokers

to promote themselves in a crowded market.

The RIBO Code of Conduct forms the back-

bone to our industry Marketing Guidelines.

They are designed to promote responsible

marketing by brokers. Advertising, regardless

of the media chosen, should adhere to the

following guidelines:

• It must be demonstrably true, accurateand verifiable.

• It should not be misleading, confusingor deceptive, or likely to mislead, con-fuse or deceive.

• It should be in the best interest of thepublic and consistent with the integrityof the profession.

Remember that RIBO Regulations require a

broker to carry on business "only" under the

RIBO-registered name of the brokerage. As

well, remember that the Principal Broker is

ultimately accountable for any advertising of

the firm(s) or individuals for whom they are

responsible. If you have any questions, RIBO

staff is always ready to review and discuss

any marketing initiative in advance of actual

usage. They aim to be sensitive to your tim-

ing and usually turn requests around quickly.

A little bit of guidance up front can quite pos-

sibly save you some money and help avoid

any compliance issues down the road.

Brokerages, like any other business, regularly

identify and implement policies to make their

business more efficient and more profitable.

While there is certainly nothing wrong with

that in principle, it should not come at the

cost of providing our customers with the level

of service they are entitled to expect. While

we may rely on appropriately trained broker-

age staff for some renewal processing and

paperwork, brokers must still understand and

satisfy the insurance needs of their clients.

We must make reasonable efforts to reach

out to our clients and ensure our information

about them remains current and their

coverage remains relevant. Brokerage

polices adopted for the sake of efficiency

should also require adherence to meaningful

customer service standards.

Related to this and with specific reference to

auto insurance, brokers have an ongoing

obligation to review the optional benefits

available with their clients, not only when

writing new business but also upon renewal.

As a client’s circumstances may change

through the year, their coverage needs may

change as well. Such a review and concur-

rent file documentation will benefit the client,

and ensure that brokers fulfil their responsibility

to offer suitable coverage to their clients

based upon their specific needs. Also note

that the RIBO spot check program seeks

to determine if such a review process is

in place.

This has been a challenging year weather-

wise and one that has seen a significant

amount of residential flooding. Torrential

Report from the President

I am pleased to present my Report for 2014.

DOUG GRAHLMANPresident

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rainfall in many parts of the province left

thousands of basements with water dam-

age. Brokers' and insurers' phones rang off

the hook with claims inquiries. For those expe-

riencing water damage, they typically do not

distinguish between something that was

‘sudden and accidental’, or something result-

ing from cracks or leaks, or something

caused by spring run-off…their interest is in

having their problems addressed by their

insurance professionals. The frequency of

incidents and the corresponding increase in

claims has led many insurers to amend

dramatically the home coverage they offer.

This coverage may vary from region to

region, depending on numerous factors.

As with auto coverage, the time to educate

our clients about what is, and is not, covered

in their home policies is at the time we initially

write the policy and anytime the coverage is

changing. It is imperative that we as brokers

understand our client's needs as well as what

coverage is available to them. As importantly,

we should explain their coverage at the time

the policy is being written or renewed and

take the time to document our client files, set-

ting out what was discussed. Consider as well

taking the opportunity to educate your

clients on how best to prepare themselves

against water damage.

Taking time with your client and clarifying this

or any other insurance matter is a great way

to build and develop the relationship. Brokers

are being encouraged by IBAO and other

industry leaders to reach out to their clients

multiple times each year. Both auto insur-

ance and water damage are great topics

to start the process. Brochures, websites and

social media are excellent vehicles for

reaching out to your clients on a variety of

insurance-related issues.

Following the Spring election, the provincial

government reintroduced legislation aimed

at combatting insurance fraud. Consistent

with their initial bill, the legislation seeks

tighter controls over tow truck operators and

health clinics, amongst others, in an effort to

reduce the amount of fraud present in the

auto insurance sector. The promised auto pre-

mium reductions are in large part depen-

dant on reducing instances of fraud in the

sector. Brokers can play an important role in

fighting fraud through sensitivity to circum-

stances surrounding a claim. Conditions

may suggest something is not quite right, for

example, staged accidents. Having a sec-

ond look where client activity seems to indi-

cate some deceptive purpose may support

concerns of the insurer or others investigating

the occurrence.

Both FSCO and the IBAO have created excel-

lent materials that seek to educate the pub-

lic on auto insurance fraud. We encourage

brokers to make use of these materials by

having them available in your office, on your

websites, etc. Further, brokers are encouraged

to report good faith concerns about poten-

tial fraud to insurance companies, regulators

and, where appropriate, the police.

In closing, I wish to thank my fellow Council

members and RIBO staff for helping make

these past 6 years enjoyable. While I will miss

direct participation on RIBO Council, I am

confident that both those returning and

those commencing a new term will serve with

professionalism, dedication and enthusiasm.

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In the 2013 Council elections, Beth Pearson

and Norma Hitchlock received the most

ballots in the ‘under 20’ category (candidates

from a brokerage with 19 or fewer registered

staff), and both were returned to Council for a

second term. John Gelston was acclaimed in

the ’20 plus’ category. Council elected the

following as officers of the corporation:

President: Doug Grahman

Vice-President: Beth Pearson

Treasurer: Norma Hitchlock

Secretary: Patty Crawford

In welcoming our new Council Members,

I would also like to thank departing Member

Bob Carter for his 6 years of outstanding

contribution to RIBO, including a term as RIBO

President. His career reflects a strong dedica-

tion to the brokers of Ontario, on whose

behalf I offer my sincere thanks.

I also want to acknowledge with deep

sadness the sudden passing of Danny Craig.

Danny had a long and distinguished career

as a broker. He served for many years and in

a number of capacities, including a term as

President of both IBAO and IBAC. He was

elected to RIBO Council in 2011 and was an

enthusiastic and thoughtful participant.

More importantly, Danny was an outstanding

gentleman whose ready smile and hand-

shake lit up every room he entered.

Lilian Croucher, RIBO’s long-serving Manager

of Qualification and Registration, retired at

the end of 2013. Both RIBO members and in-

dustry stakeholders thanked Lilian for her

many years of dedicated service to our pro-

fession. Council, the membership and espe-

cially RIBO staff, miss her but thankfully, her

vast institutional memory is just a phone call

or e-mail away.

As expected, Vivian Lee, Lilian’s deputy of

many years, has done an exemplary job in

her new role as Manager, Qualification and

Registration. She and her staff continue to

provide top tier service.

As of RIBO’s year-end, we had 18,252 individual

registrations. Brokerage registrations, at 1190,

remain largely the same.

Council mandated online registration

renewals commencing with the 2014/2015

renewal season. This was optional for the past

several years, but it is an option that proved

increasingly popular with our membership.

We expect significant time savings in the

amount of ‘hands on’ time required for staff

to manage the renewal process, not to

mention the reduction in paper waste.

We aim to make our system user-friendly, and

to ensure the membership has available the

information necessary to navigate the online

process. We will conduct a review of the

process once renewals are complete

and seek opportunities to refine it for the

next year.

Ontario brokers enjoy the privilege of self-reg-

ulation. The RIB Act and Regulations, as well

as RIBO By-laws and Guidelines, establish a

framework for how the profession and its reg-

ulator are expected to conduct themselves.

Both the Qualification and Registration

Committee and the Discipline Committee

are administrative tribunals, empowered and

required to consider, respectively, licensing

matters and allegations of misconduct. They

must do so in a matter that is consistent with

Rules of Natural Justice as well as administra-

tive fairness. While these concepts may be fa-

miliar to lawyers, most administrative tribunal

members do not necessarily have this train-

Report from the Chief Executive Officer

I am pleased to offer my Report for the 2013/2014 year.

JEFF BEARChief Executive Officer

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ing when they join. Accordingly, Council’s

2014 Strategic Planning session focused on

RIBO hearings, and how we could best

ensure the process and decision-making is

carried out consistent with legal require-

ments. By so doing, we demonstrate that we

take self-regulation very seriously and that

we pro-actively take steps to maintain that

privilege for the future.

RIBO was pleased to co-chair a joint initiative

of the Canadian Insurance Services Regula-

tory Organization (“CISRO”) and the Cana-

dian Council of Insurance Regulators

(“CCIR”) that saw the creation of a search-

able database of insurance disciplinary deci-

sions in Canada. The goal of this database

(which went live in December 2013) is to

enable regulators, the public, and other

industry stakeholders to search a single

database to determine if any disciplinary

actions have been taken against an existing

insurance participant or applicants from

another Canadian jurisdiction. Previously,

obtaining this information required a search

of numerous regulatory databases. Regula-

tory decisions that were publicly available

on individual regulatory websites are now

available through the national database. In

addition to all new decisions, the database

includes published decisions dating back

to 2008.

This database is an excellent example of

the benefits of our active participation with

CISRO, working with other insurance interme-

diary regulators toward a consistent or

harmonized response to common issues.

By so doing, we hope to avoid duplication of

efforts and to minimize the regulatory burden

for industry participants.

We continue to nurture our relationship with

other regulatory agencies and industry partici-

pants. In particular, we meet regularly with the

Financial Services Commission of Ontario with

an eye to emerging issues, trends and effective

solutions relating to matters of common con-

cern. We also maintain an open dialogue with

both the Toronto Insurance Conference and

the Insurance Brokers Association of Ontario,

with the goal of, wherever possible, achieving

coordinated responses to industry issues. Both

through the associations and on an individual

basis, we strive to offer timely guidance to all

RIBO members and to be responsive to them

when they need assistance.

In closing, I want to emphasize that the

strength of RIBO is its membership. Thank you

for the comments and feedback I have re-

ceived from you over the past year. It is

through this interaction and dialogue that, to-

gether, we meet the challenges that lay

ahead. We welcome any opportunity to

come to speak to you on issues of interest.

Please do not hesitate to write, call, e-mail or

fax any Council or Staff member with your

concerns or suggestions.

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One of RIBO’s essential operational dutiesis to ensure that, when a complaint is re-

ceived against a broker, both sides of the in-quiry are investigated promptly and fairly.

There are two main types of complaints han-dled by the Complaints and Investigations Department. The first is finance related, and isusually generated as a result of a spot check ora broker review. The most common types of finance complaints relate to trust deficits, followed by inadequate books and records.

The second type of complaint is conduct re-lated, and is normally initiated by a consumercomplaint. When a member of the public or afellow broker makes a complaint, the ConsumerComplaints Officer reviews it and decideswhether or not there are probable grounds tosubstantiate the complaint against a registeredbroker. The complainant is asked to providehis/her written complaint to RIBO, along withany relevant supporting documentation.

Once the written complaint is received by RIBO,an inquiry file is opened and assigned to an in-vestigator for further examination. Additionalevidence is gathered and statements aretaken. If the investigation results in formal com-plaint charges being laid against a broker, thenthe matter is referred to a Complaints Commit-tee for direction. If the Complaints Committeedecides there is enough evidence to indicatepossible misconduct, the matter is referred tothe Discipline Committee for a hearing andfinal decision.

In meeting the needs of consumers, we makeevery effort to ensure that their complaints arehandled fairly, promptly, and professionally. In alldealings, the consumer is treated with respectand courtesy.

STATISTICAL SUMMARIES

The following statistical summaries are a reflection of the excellent work done by ourComplaints and Investigations Department.The Manager, Tim Goff, continues to review theinternal procedures of the Department, andconstantly looks for ways to improve them.

• RIBO received just over 1200 inquiry tele-phone calls last year, which is approximatelya 15% reduction over the calls from the previ-ous year. The Consumer Complaints Officerattempts to resolve as many of the com-plaint calls within RIBO’s jurisdiction as possi-ble. Of the 1200 consumer inquiry calls,approximately 90% of the “telephone complaints” were resolved in this manner.

• 105 new files were opened this year, whichrequired investigation by RIBO staff. (Pleaserefer to Chart 1 to review the sources andtypes of complaints).

• We began this year with 50 active files,meaning investigations or complaints proceedings were already in progress from the previous year.

• 103 files were resolved and closed this year, leaving 52 in progress which will be carried over.

• The Complaints Committee consists of a three-member panel, comprised of two brokers and a public member. The Complaints Committees met on 7 separate occasions.

• In each case, the broker who is the subjectof the complaint is invited to the meetings.Brokers attended 90% of the time.

Report of the Professional Development Committee

The Registered Insurance Brokers Act and Regulations govern all general insurance brokers in Ontario. It is the responsibility ofRIBO’s Board of Directors, its committees and staff to administerthe Act and the Regulations.

JOHN GELSTONChairperson

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• During the Complaints Committee meet-ings, 6 of the files were closed in the broker’sfavour, with 19 cases raising issues regardingmisconduct, resulting in referral to the Disci-pline Committee for further review.

• Of the 19 cases that raised issues regardingmisconduct, 16 were referred directly to theDiscipline Committee for hearings and 3were offered a resolution on a consent basis.

• The Discipline Committee consists of a five-member panel, comprised of four brokersand one public member. These panels heldhearings on 7 days during the year. 4 caseswere presented for approval on a consentbasis and 11 required hearings.

• Multiple penalties were assigned in many ofthe cases, which is the reason that the dis-positions in the chart below add up to morethan the total of the cases presented.

• The random spot-check program this year resulted in 258 spot checks of which only 2 resulted in any kind of formal proceeding.There were 5 spot checks in progress or withfollow up at fiscal year end included in thetotal number of 258 spot checks. This yearthe goal is to conduct 300 brokerage visits.

I would like to take this opportunity to thankmy fellow Committee members who willinglyvolunteer their time. A special thank you goesto the staff of the Complaints and DisciplineDepartment for their hard work and support,in particular, to Tim Goff, for his guidancethroughout the year.

It has been a pleasure serving as the Chair-person of the Professional DevelopmentCommittee this year. I thank you for the opportunity.

Professional Development ChartsSource and Type of Complaint Files

Disposition of Disciplinary Proceedings 13/14 12/13 11/12

Certificate of Registration Revoked 0 4 5

Certificate of Registration Suspended 6 3 3

Certificate of Registration Restricted 4 2 1

Attendance at Education Course Ordered 2 0 6

Additional Financial Reports Ordered 5 8 4

Fines, Payable to Ministry of Finance 2 2 3

Registrant Reprimanded 3 3 6

Dismissed in Broker’s Favour 0 1 1

Source 13/14 12/13

Non – Compliance 45 43

Public 39 28

Member Brokers 18 26

Insurers 1 1

Lawyers 1 1

Government & Other Sources 1 2

Total 105 101

Type 13/14 12/13

Code of Conduct 62 58

Other Misconduct 0 0

Delinquent Filing 19 7

Trust Funds 19 28

Equity Requirements 1 0

Financial Records 4 8

Non-Compliance (other regs.) 0 0

Criminal Allegations 0 0

Total 105 101

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The Qualification and Registration Commit-tee meets every month to address current

and emerging issues and discuss any influ-ence and potential impact they may have onour regulatory responsibilities and standards.

The following statistical summary details the work of the Committee and departmentover the last fiscal year (August 1, 2013 – July 31, 2014):

The Committee reviewed a total of 220 requests. The majority (215) were requests for secondary business exemptions. These requests require exemption from Regulation991, Section 5 (i) (b). Over the course of theyear, the Committee granted 214 secondarybusiness exemptions. Twenty-four of the re-quests were for exemptions to sell financialproducts. Requests for secondary businessexemptions are mainly from individuals whoneed to supplement their incomes. In the de-cision process the Committee evaluates eachrequest, taking all comments and concernsinto consideration, including the possibility ofa conflict of interest, or undue influence.

In the other category, the Committee grantedone brokerage firm permission to share office

space and recommended that Councilgrant permission to two brokerage firms in another province to hold their Ontario TrustMonies in their home province on the condi-tion that they comply with the listed RIBORegulations. The Committee also refused twoapplications where the individual did notmeet the suitability qualifications for RIBOand a brokerage firm did not meet the requirements to share office space.

Of the three refusals, one requested a hearing,one was withdrawn and one is currentlypending. Of the two cases pending from the prior year, the Committee confirmed its proposed decision following a hearing.

The low number and passing ratio in the technical exams is primarily due to our decision to accept CAIB and CIP designations as an equivalency and the candidates that do write aremostly new to the commercial lines field.

Report of the Qualification & Registration Department

I am thankful for the opportunity to serve as Chair of the Qualification and Registration Committee.

BETH PEARSONChair

New Brokers – Acting Under Supervision 13/14 12/13

Exams Written (including equivalency exams) 2479 2354

Pass Rate (including equivalency exams) 63% 66%

Pass Rate (full basic-broker exam) for those attending a course 75% 76%

Pass Rate (full basic-broker exam) for those not attending a course 58% 62%

Level II - Removal of Restriction 13/14 12/13

Technical Exams Written 20 30

Pass Rate 53% 30%

Management Exams Written 121 150

Pass Rate 58% 67%

Committee Decisions Granted Refused

Application for Secondary Business Exemption 214 1

Application for Removal of Restrictions 0 0

Other 3 2

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Hearing Summary 13/14 12/13 11/12 10/11

Review of Qualification to hold a certificate Granted 0 0 0 1

Refused 2 0 0 0

Application for Exemption Secondary Occupation Granted 0 0 0 1

Refused 0 0 0 2

Application for Removal of Restriction Granted 0 0 0 0

Refused 0 0 0 0

Other Granted 0 1 0 0

Refused 1 0 0 0

Total 3 1 0 4

Registration 13/14 12/13 11/12 10/11

Individual Registrants 18,252 17,875 17,526 17,111

Partnerships & Corporations 1,130 1,140 1,153 1,163

Sole Proprietorships 9 10 11 13

Consultants & Wholesalers 51 46 40 37

Active Businesses *1,190 *1,196 *1,204 *1,213

Average number of registrants per business 15.52 14.95 14.56 14.1

All applicants have the right to request a hearing after the Committee has considered andproposed to refuse registration, exemption or has proposed to restrict, revoke or not renew an existing registration.

*Non-active business registrations are not included in the registration numbers.

Even with further consolidation and amalgamation, we have remained consistent over the pastfew years. At the same time, individual registrations have increased.

Chris Ward Memorial AwardThis award is presented in memory of RIBO’slate president Christopher J. Ward, to the indi-vidual who receives the highest mark on thefirst attempt of either the Management orTechnical examination. I’m happy to an-nounce that this year’s recipient is DeborahMoore of Canada Brokerlink (Ontario) Inc.

Donald W. Lambie AwardThis award is presented in recognition of Mr.Lambie’s commitment to self-regulation andhis outstanding contribution to the brokerprofession. Mr. Lambie is one of RIBO’s found-ing fathers and also acted as the first Presi-dent.

The Donald W. Lambie Award is presented tothe individual with the highest mark in the ini-tial RIBO qualification examination. This year’s

recipient is Andrew Young of Philpot & Del-gaty Limited.

Please join us in congratulating the awardwinners. We look forward to recognizing theirachievements at the Annual Meeting on No-vember 6, 2014.

I would like to take this opportunity to thankmy fellow Council members for their supportand input over the past.

In closing I would like to express my thanks tothe Qualification and Registration Staff fortheir dedication and support.

Please feel free to contact staff or committeemembers at any time. We hope that you willcontinue to contact us for advice or to ad-dress any concerns you may have.

We look forward to working with you in thecoming year.

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RIBO staff continues to make every effort to provide fair and helpful service to our members and the public.~

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RIBO STAFF 2013 - 2014 Seated (Left to Right):Management: Tim Goff (Complaints & Investigation), Patrick Ballantyne (General Counsel), Jeff Bear (Chief Executive Officer),Vivian Lee (Qualification & Registration), Winston Koo (Administration & Finance).

Standing (Left to Right):Barbara Dalgleish-Reid , Erica Lo, Laurie Reynolds, Angela Daley, Christopher Thorn, Gustavo Blandon, Lise Clements, DianaCampoli, Tracy Cullen, Debbie Lee, Lloyd Choong, Sheron Fraser, Wendy Wu, Arthur Kosikowski, Valrie Bailey, Nadine Austin, IreneChung.

Absent:Michael Buck, Crystal Skyvington.

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Opening of MeetingThe outgoing President, Bob Carter, intro-duced members of the Board for 2013 thatwere in attendance. They were: Gil Constantini,Danny Craig, Patty Crawford, Nick Dzudz,Doug Grahlman, Norma Hitchlock, Trish Krawec,Tracy McLean and Beth Pearson.

The Chairperson, Bob Carter, then introducedJeff Bear, Chief Executive Officer of RIBO andthen introduced the rest of RIBO staff andthanked everyone for their dedication andhard work throughout the year.

The Chairperson then introduced the repre-sentative from Network Court Reporting Limited who was requested to act as Recording Secretary of the meeting.

Appointment of Scrutineers: Report as to QuorumThe Chairperson called for the appointmentof Gustavo Blandon, Diana Campoli andTracy Cullen to act as scrutineers of the meeting. As there were no objections, these individuals were so appointed.

The scrutineers informed the Chairperson that a quorum of members was present at the meeting.

Notice of MeetingThe Chairperson advised that the Secretaryhad received the Declaration of Mailing fromPostage Savers Inc., declaring that the Noticecalling the meeting, together with the AnnualReport and Financial Statements of the Corpo-ration, were mailed in accordance with the By-Laws of the Corporation.

Constitution of MeetingAs the Notice of Meeting had been duly givento the registrants of the Corporation entitled toreceive such Notice, and having been advisedby the Scrutineers that a quorum of registrantswas present, the Chairperson declared thatthe meeting was properly constituted for thetransaction of business as set out in the Noticeof Meeting.

The Chairperson then introduced invitedguests present at the meeting, as well asmembers of the insurance press and a number of RIBO Past Presidents.

Question Period ProceduresThe Chairperson reviewed the procedures to beused during the question period following thebusiness portion of the meeting.

Minutes of the November 7, 2012Annual General Meeting:The Chairperson inquired if there were any objections to the dispensing of the reading ofthe Minutes. There were no objections raised.

It was moved by Al Chamney and secondedby David Yeates that the Minutes of the November 7, 2012 Annual Meeting be approved as presented. Motion Carried.

President’s ReportBob Carter thanked his fellow Council membersand RIBO staff members for their support andencouragement throughout his term. His reportincluded the following comments.

This year RIBO staff conducted hour-long semi-nars across the province, aimed primarily atprincipal brokers. The seminars were designedto help principal brokers better understandRIBO’s expectations about their supervisory obligations. The sessions also set out RIBO’s interpretation of the overall duty to provide direction and supervision. In addition, somecommon issues were touched upon, includingmarketing, client communications, disclosure,dealing with police and dealing with technol-ogy. They logged over 2,500 kilometers, notcounting the flights to Sault Ste. Marie and Thunder Bay. They also visited 18 communitiesand presented to well over 1,000 brokers.

The IBAO was very generous in allowing us toadd our sessions on to their agenda at theirregional meetings. They also allowed non-members of the IBAO to attend. During theseminars, staff included a walkthrough ofRIBO’s online renewal system for the 2013-2014renewal season where approximately 65 per-cent took advantage of this online option. Weexpect that online process will be mandatoryfor the 2014-2015 renewal season.

This past year, auto premiums have been infocus at Queen’s Park. The increased visibilityof “telematics” and their potential in Ontariohave been getting a lot of media attentionwhich in turn has the potential to send our

Registered Insurance Brokers of Ontario

Minutes of the Thirty-Second Annual General Meeting of Registrants of the Registered Insurance Brokers of Ontario heldon Thursday, November 7th, 2013 at 1:30 p.m. in the ArcadianRoom of the Simpson Tower, Toronto, Ontario.

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clients into our offices eager to find out howtheir premiums may be impacted. This is agood opportunity to review their existing cov-erage and to explain to them the variousitems reflected in their premiums.

RIBO is an inaugural participant in an impor-tant joint initiative of the Canadian InsuranceServices Regulatory Organization and theCanadian Council of Insurance Regulators. Thisinitiative will create a searchable database ofinsurance disciplinary decisions in Canada.Regulators, the public and other industry stake-holders will be able to search a single data-base to determine if disciplinary actions havebeen taken against an insurance participant orapplicant from another Canadian jurisdiction.This information has the potential to lead tomore effective regulation and decision making.Currently, obtaining this information requires asearch of numerous regulatory databases. Regulatory decisions currently available pub-licly and on individual regulatory websites willbe made available to the national database.

In closing, Bob Carter expressed his gratitude toserve as RIBO’s President and thanked his fellowcouncil members and RIBO staff for all their support and encouragement.

Presentation of theChris Ward Memorial AwardThe Chairperson requested that DougGrahlman, RIBO’s Chair of the Qualificationand Registration Committee and LilianCroucher, Manager of Qualification and Regis-tration present the Chris Ward Memorial Awardto Adam Shier of Hudson-Henderson InsuranceBrokers for receiving the highest mark on thefirst attempt of the Level II Examination.

Presentation of the Donald W. Lambie Education Award The Chairperson requested Don Lambie andLilian Croucher to present the Donald W. LambieEducation Award to Spencer Yule of LacknerMcLennan Insurance Ltd. for receiving thehighest mark in the initial RIBO QualificationExamination.

Presentation of the Annual ReportThe Chairperson introduced the first item ofbusiness, namely the presentation of the An-nual Report of the Corporation for the yearended July 31, 2013. He requested that a copyof the Annual Report be filed with the Minutesof this meeting. In the absence of Claire Corn-wall of PricewaterhouseCoopers, he asked BethPearson, RIBO’s Secretary, to read the auditors’report to members.

Following the reading of the auditors’ report, theChairperson inquired if registrants had anyquestions. There were no queries at this time.

It was moved by Don Lambie and secondedby Paul Armstrong that registrants approve theadoption of the Annual Report of the Corpora-tion for the year ended July 31, 2013, includingthe standing Committee Reports and the Auditors’ Report on the Financial Statements.Motion Carried.

Appointment of AuditorsIt was movedby Beth Pearson and seconded byJohn Gelston that PricewaterhouseCoopers bere-appointed as Auditors of the Corporationuntil the next Annual Meeting or until their suc-cessors are appointed, and their remunerationas such be fixed by the Council, and the Council be authorized to fix such remuneration. Motion Carried.

Election ResultsThe Chairperson called upon the CEO to announce the results of the election. The CEO,Jeff Bear, reported that this year there was apoll in the under 20 broker category withthree nominations for two positions. The nomi-nees were Patty Crawford, Norma Hitchlockand Glenn Woolfrey. The two candidateselected to Council are Patty Crawford (incumbent) and Norma Hitchlock (incumbent).

In the over 20 broker category there was one nominee at the close of nominations,John Gelston, so by acclamation, John Gelstonwas elected in that category.

The Chairperson congratulated and welcomed John Gelston to RIBO Council and congratulated Patty Crawford andNorma Hitchlock on being re-elected for a second term on RIBO Council.

The Chairperson then thanked Lilian Croucherfor her dedication to RIBO for 23 years asQualification and Registration Manager.

Question PeriodThe Chairperson asked at this time if there wereany questions from the assembly. There were no questions.

Termination of MeetingOn behalf of Council, the Chairperson expressed his appreciation to all registrants attending the meeting.

He then requested a motion from the floor toadjourn the meeting.

At 1:56 p.m., there being no further business, itwas moved by David Yeates and seconded byPaul Armstrong that the meeting be adjourned,whereupon the Chairperson declared themeeting adjourned. Motion Carried.

Registered InsuranceBrokers of Ontario

Financial StatementsJuly 31, 2014 and July 31, 2013

PricewaterhouseCoopers LLPPwC Tower, 18 York Street, Suite 2600, Toronto, Ontario, Canada M5J 0B2T: +1 416 863 1133, F: +1 416 365 8215

“PwC” refers to PricewaterhouseCoopers LLP, an Ontario limited liability partnership.

September 10, 2014

Independent Auditor’s Report

To the Registrants of

Registered Insurance Brokers of Ontario

We have audited the accompanying financial statements of Registered Insurance Brokers of Ontario

(RIBO), which comprise the balance sheets as at July 31, 2014 and July 31, 2013 and the statements of

operations, changes in the RIBO Professional Indemnification Fund and cash flows for the years then

ended, and the related notes, which comprise a summary of significant accounting policies and other

explanatory information.

Management’s responsibility for the financial statements

Management is responsible for the preparation and fair presentation of these financial statements in

accordance with Canadian generally accepted accounting standards for not-for-profit organizations, and

for such internal control as management determines is necessary to enable the preparation of financial

statements that are free from material misstatement, whether due to fraud or error.

Auditor’s responsibility

Our responsibility is to express an opinion on these financial statements based on our audits. We

conducted our audits in accordance with Canadian generally accepted auditing standards. Those standards

require that we comply with ethical requirements and plan and perform the audit to obtain reasonable

assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in

the financial statements. The procedures selected depend on the auditor’s judgment, including the

assessment of the risks of material misstatement of the financial statements, whether due to fraud or

error. In making those risk assessments, the auditor considers internal control relevant to the entity’s

preparation and fair presentation of the financial statements in order to design audit procedures that are

appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of

the entity’s internal control. An audit also includes evaluating the appropriateness of accounting policies

used and the reasonableness of accounting estimates made by management, as well as evaluating the

overall presentation of the financial statements.

We believe that the audit evidence we have obtained in our audits is sufficient and appropriate to provide a

basis for our audit opinion.

OpinionIn our opinion, the financial statements present fairly, in all material respects, the financial position ofRegistered Insurance Brokers of Ontario as at July 31, 2014 and July 31, 2013 and the results of itsoperations, changes in the Professional Indemnification Fund and its cash flows for the years then endedin accordance with Canadian generally accepted accounting standards for not-for-profit organizations.

(Signed) “PricewaterhouseCoopers LLP”

Chartered Professional Accountants, Licensed Public Accountants

Registered Insurance Brokers of OntarioStatements of OperationsFor the years ended July 31, 2014 and July 31, 2013

The accompanying notes are an integral part of these financial statements.

2014$

2013$

External costs of regulationQualification and registration 135,623 123,489Complaints and disciplinary investigations and hearings 206,935 204,741Consumer protection expenses 57,127 57,127

399,685 385,357

External costs of communicationBulletins and mailings 8,500 8,600Election expenses 17,492 -Annual meeting 35,060 40,602Other communication expenses 69,335 49,196

130,387 98,398

Administration costsSalaries and employee benefits 2,607,202 2,518,895Rent, property taxes and utilities 423,391 329,038Office and general 348,843 334,268Professional fees 16,279 14,831Committees 91,827 140,384Computer expenses 116,620 110,098Amortization 38,520 50,851

3,642,682 3,498,365

4,172,754 3,982,120

Funding of operating costsRegistration and examination fees 4,041,303 4,014,084Investment and other income 147,684 151,018

4,188,987 4,165,102

Excess of revenue over operating costs for the year 16,233 182,982

Operating Fund - Beginning of year 3,686,229 3,503,247

Operating Fund - End of year 3,702,462 3,686,229

Registered Insurance Brokers of OntarioStatements of Changes in the RIBO Professional Indemnification FundFor the years ended July 31, 2014 and July 31, 2013


2014$

2013$

Fund balance - Beginning of year 955,792 955,792

Fund balance - End of year 955,792 955,792

Registered Insurance Brokers of OntarioStatements of Cash FlowsFor the years ended July 31, 2014 and July 31, 2013


2014$

2013$

Cash provided by (used in)

Operating activitiesRegistration fees collected 4,041,475 4,135,488Examination fees collected 383,615 366,060Investment and other income received 147,684 151,018Cash paid to suppliers and employees (4,225,181) (3,745,493)

Increase in cash during the year 347,593 907,073

Cash - Beginning of year 5,197,247 4,290,174

Cash - End of year 5,544,840 5,197,247

Registered Insurance Brokers of OntarioNotes to Financial StatementsJuly 31, 2014 and July 31, 2013

(1)

1 Significant corporate information

Registered Insurance Brokers of Ontario (the Corporation or RIBO) was continued as a corporate body withoutshare capital under the Registered Insurance Brokers Act, R.S.O. 1980 (the Act). The Corporation operates as anon-profit organization with the general purpose of carrying out the powers and duties conferred on it by theAct. These powers and duties relate primarily to the regulation of insurance brokers in the Province of Ontario.

In accordance with its statutory responsibilities, the Corporation’s duties include: administering thequalification and annual registration of brokers; carrying out investigations and conducting disciplinaryproceedings in response to complaints and other causes of action; and maintaining communications withregistrants and the public.

As required by the Act, the costs of carrying out these duties are funded by fees levied on broker registrants.

The Corporation is required to maintain an ability at all times to discharge its regulatory responsibilities underthe Act. Certain costs of discharging these responsibilities, for example, those of disciplinary investigations andhearings, can vary significantly and, consequently, may not be accurately predicted and budgeted for inadvance. Accordingly, the Corporation maintains a stop loss insurance policy to anticipate any requirement tofinance investigation and trusteeship cost that may increase significantly in excess of the policy deductible inany year.

The Corporation is exempt from income taxes under Section 149(1)(l) of the Income Tax Act (Canada) as a non-profit organization.

2 Summary of significant accounting policies

These financial statements are prepared in accordance with Canadian accounting standards for not-for-profitorganizations (ASNPO), Part III of the Chartered Professional Accountants of Canada Handbook. Thesignificant accounting policies adopted by the Corporation are summarized as follows.

Registration and examination fees

Fees are recorded on an accrual basis. Registration fees cover the annual period from October 1 toSeptember 30 and are received in advance. Registration fees received in the period relating to periodssubsequent to July 31, 2014 are deferred and included as unearned revenue on the balance sheet. Unearnedrevenue consists of fees paid in advance for the 12-month membership period to September 30, 2015 of$1,324,360 (2013 - $952,080) and fees relating to the last two months of the membership period toSeptember 30, 2014 of $642,992 (2013 - $631,485).


(2)

Property and equipment and intangible assets

Property and equipment and intangibles are recorded at cost. Amortization is provided on a straight-line basis

over the assets’ estimated useful life as follows:

Computer equipment 3 yearsComputer software 3 - 5 years

Financial assets and liabilities

The Corporation initially measures its financial assets and financial liabilities at fair value and subsequently

measures its financial assets and financial liabilities at amortized cost. Changes in fair value are recognized in

the statements of operations. Financial assets, at amortized cost, are tested for impairment at the end of each

reporting period where there are indicators that the asset may be impaired.

Financial assets measured at amortized cost include cash, cash in trust, and prepaid expenses and sundry

assets.

Financial liabilities measured at amortized cost include accounts payable and accrued liabilities.

It is management’s opinion that the Corporation is not exposed to significant interest rate, currency or credit

risks arising from these financial instruments.

Use of estimates

The preparation of financial statements requires management to make estimates and assumptions that affect

the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of

the financial statements and the reported amount of revenues and expenses during the reporting period. The

estimates are reviewed periodically and as adjustments become necessary they are reported in the year in which

they become known. Actual results could differ from those estimates.


(3)

3 Property and equipment

The Corporation did not purchase computer equipment during 2014 and 2013. The computer equipment

acquired in 2012 is amortized on a straight-line basis over its useful life of three years. As at July 31, 2014 and

July 31, 2013, property and equipment consist of the following:

2014

Cost$

Accumulatedamortization

$Net

$

Computer equipment 76,705 70,085 6,620

2013

Cost$


$Net

$

Computer equipment 76,705 56,845 19,860

4 Intangible assets

The Corporation did not acquire intangible assets during 2014 and 2013. The intangible asset acquired in 2012

is amortized on a straight-line basis over its useful life of three years. The remaining intangible asset is

amortized on a straight-line basis over its useful life of five years.

2014

Cost$


$Net

$

Computer software 118,613 116,673 1,940

2013

Cost$


$Net

$

Computer software 118,613 91,393 27,220


(4)

5 Financial risk management

The Corporation is exposed to liquidity risk and has adopted an integrated risk management framework. The

Framework provides a consistent methodology to manage risks.

Liquidity risk

Liquidity risk results from the Corporation’s potential inability to meet its obligations associated with the

financial liabilities as they come due. The Corporation manages its liquidity risk by forecasting cash flows from

operations to ensure it has sufficient available funds to meet current and foreseeable financial requirements.

The Corporation’s exposure to liquidity risk relates to the amount of accounts payable and accrued liabilities.

6 Commitments

The Corporation is committed to make future minimum lease payments of $2,279,331 for office premises and

equipment operating leases.

The listing of commitments below represents future minimum lease payments for office premises and

equipment operating leases as follows:

$

2015 236,9942016 243,0802017 247,4272018 235,4972019 235,618Thereafter 1,080,715

2,279,331

7 Fund balances

RIBO Professional Indemnification Fund

The Fund was established on July 29, 1992 by a deed of trust to cover losses on claims for premiums

misappropriated by brokers, not recoverable under the brokerage’s standard fidelity bond policy, to a maximum

of $10,000 per claimant.

As at July 31, 2014, the Fund comprised cash in trust of $955,792 (2013 - $955,792).

Any shortfall in net assets of the Fund from a minimum of $500,000 may be required to be reimbursed to the

Fund from the Operating Fund at the discretion of the trustees of the Fund. At their discretion, the trustees may

transfer any surplus above $500,000 in the Fund to the Operating Fund. The RIBO Council, at its discretion,

may amend the deed of trust to vary the minimum net assets required in the Fund.

Operating Fund

The Corporation maintains the Operating Fund to assist in the ongoing funding of operations.

Documents

2013/2014 Annual Report